Retailers grappling with changes in tax regulations

NORTH CANAAN — The Oct. 1, 2019, tax changes in Connecticut have been a topic of much discussion and consternation, especially among vendors of food and beverages. 

Retailers throughout the region were reprogramming their cash registers and trying to figure out the complexities of the new take-out food taxes last week, which add 1% to the tax on prepared foods in a wide variety of categories. 

VFW Couch-Pipa Post 6851 in North Canaan has specific concerns about the increase in taxes on alcohol, food and hall rentals. 

In a letter dated Oct. 1, Post Commander Kirk Harrington urged all VFW members to contact their state and federal Democratic representatives to express concerns about the taxes, which include a 10% increase in alcohol taxes. 

“The state budget passed by the General Assembly and signed into law by Governor Ned Lamont in June will have an adverse effect on our ability to keep costs down for those that have served this Great Nation,” the letter says.

“Just doing our share in service to the Nation has met with deaf ears in the U.S. Congress and in our State Capitol,” the letter continues. “Unfortunately, all of our prices will need to change effective immediately and the cost of supporting our veterans will be passed on to you — the working men and women of our immediate area.”

The letter exhorts readers to contact state Rep. Maria Horn (D-64), U.S. Rep. Jahana Hayes (D-5), U.S. Senators Richard Blumenthal and Chris Murphy and Gov. Ned Lamont, all of whom are democrats. State Sen. Craig Miner, who is a Republican, is not on the list.

Harrington said in an interview Oct. 1 that he and the veterans have worked hard to make improvements at Couch-Pipa and to invite the community in for everything from car shows to lobster bakes to summer concerts on the new outdoor stage. 

The parking lot was repaved this summer. The event hall was renovated several years ago and is used for everything from family reunions to fundraising sales. 

Membership has increased from 88 to 173 individuals since 2012. 

Though the new laws mostly increase taxes, there is a 50% decrease on the excise tax for craft breweries. This decrease applies to sales on product purchased “to go” only, and is calculated by the gallon. An average “growler” filled to go at a brewery is half a gallon. For reference, the previous rate was $0.23 per gallon. This price decrease will have a marginal impact on consumer costs. 

The excise tax on all other alcoholic beverages has been increased by 10%. For context, the excise on still wines from large wineries has gone from $0.72 to $0.79 per gallon. A case of wine is 2.37 gallons. 

This cost increase is assumed at a distributor level, and may or may not be passed along to retail vendors, depending on the distributor’s margin on each item. 

Connecticut had not raised its excise tax since 2011. At present, the state’s excise rate falls somewhere in the middle nationwide, with the lowest being around $0.20 per gallon and the highest $2.70. 

State Rep. Maria Horn said in an interview on Thursday, Oct.3, that she welcomes any and all engagement from veterans and citizens in general with their concerns over these changes. 

Keeping an open dialogue is crucial to any future revisions that will be made to the legislation. She said she recognizes the unique difficulty that VFW posts face when determining whether to increase costs; VFW customers are its members, and no one wants to negatively impact a member’s ability to patronize their chapter and be a part of the veteran community. 

The Northwest Corner’s small population means it is even more essential to maintain a customer base in order to keep doors open at restaurants and bars. 

It is hard to imagine a situation in which this legislation would be warmly welcomed. Zero percent of people enjoy paying more for things, especially universally consumed items such as food and beverages. 

Nonetheless, Horn said, an increase in the income tax would have been equally unpopular. The priority was to raise revenue and balance the state budget. 

Horn said her ears are open to any suggestions for exemptions to this new tax legislation, be it for nonprofits or other organizations.